Expanding on cross-price elasticity: Understanding tobacco product demand and substitution from the cross-price purchase task

Abstract

We examine whether cigarettes serve as substitutes for electronic nicotine delivery systems (ENDS) among ENDS users and demonstrate methodological extensions of data from a cross-price purchase task to inform policies and interventions. During a clinical laboratory study, n = 19 exclusive ENDS users and n = 17 dual cigarette/ENDS users completed a cross-price purchase task with cigarettes available at a fixed price while prices of own-brand ENDS increased. We estimated cross-price elasticity using linear models to examine substitutability. We defined five additional outcomes: nonzero cross-price intensity (purchasing cigarettes if ENDS were free), constant null demand (not purchasing cigarettes at any ENDS price), cross-product crossover point (first price where participants purchased more cigarettes than ENDS), dual-demand score (percentage of prices where both products were purchased), and dual-use break point (minimum relative price to force complete substitution). The cross-price elasticity results indicated that cigarettes could serve as substitutes for ENDS among ENDS users on average, but this average effect masked substantial heterogeneity in profiles of demand (here, a measure of the drug's reinforcement potential). Policies and regulations that increase ENDS prices appear unlikely to steer most exclusive ENDS users toward cigarette use, as most would not purchase cigarettes at any ENDS price, but they could prompt some dual users to substitute cigarettes completely while others remain dual users. This heterogeneity in consumer responses suggests additional indices of cross-product demand are useful to characterize the anticipated and unanticipated effects of tobacco price policies more fully.

Keywords: behavioral economics; electronic nicotine delivery system; humans; substitution; tobacco.